ANKARA (Reuters) - Turkish President Tayyip Erdogan promised on Sunday to bring down interest rates, inflation and the current account deficit following snap presidential and parliamentary elections next month.
Speaking to thousands of flag-waving supporters in Istanbul, Erdogan said a powerful new executive presidency Turkey will switch to following the elections on June 24 would give a new momentum to the economy.
Turkey’s wide current account deficit, along with double-digit inflation, are major worries for investors. Concerns about the economic outlook have helped push the lira to record lows in recent days.
Erdogan, a self-described “enemy of interest rates”, has also repeatedly called for lower borrowing costs to fuel loan growth and boost the economy. The central bank’s reluctance to tighten has exacerbated concerns that it is under political pressure.
Last month, the bank raised its top interest rate by a more-than-expected 75 basis points but analysts said it would need to do more to fight inflation and support the currency.
“I promise that inflation, interest rates and current account deficit will fall, that the Turkish economy will become more resilient to external shocks and financial attacks, that Turkey’s investment appeal will increase,” Erdogan said.
Erdogan has called snap parliamentary and presidential more than a year early. The elections will herald the launch of Turkey’s new executive presidency, that was championed by Erdogan and narrowly approved in a referendum last year.
Ahead of the elections, Turkey will roll out a debt restructuring and social reforms package costing nearly $6 billion, Prime Minister Binali Yildirim said on Wednesday.
Turkey’s inflation climbed to almost 11 percent in April, while current account deficit stood at $4.152 billion in February, data showed.
The lira tumbled as much as 1.5 percent to a record low against the dollar on Friday, exacerbated by Standard & Poor’s decision to cut Turkey’s sovereign debt rating further into junk territory on Tuesday.
Reporting by Tuvan Gumrukcu; Editing by Adrian Croft/Keith Weir